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Monday, September 23, 2013

The Apple Approach is Sorely Needed For Loyalty Rewards Programs

I went on a walk earlier today, and I got inspired to write this post. I've been a member of tons of loyalty rewards programs over the years, from local grocery stores to places like Best Buy and I am even a member of several frequent flyer miles programs. All of them, frankly, have one thing in common: They stink.

But why do they stink? That's where calm, reasoned analysis comes into play.

So, why do customer loyalty programs leave customers cold, even when customer satisfaction is so high? There are three types of loyalty: Prior loyalty (that is, your loyalty to the brand before you joined their rewards program), Present loyalty (what you are loyal to now), and future loyalty (what you could be loyal to in the future and what many companies wish to incentivize).

Prior loyalty is really difficult to judge when you are signing up for a membership program. Brick-&-mortar retail doesn't really have a major way to judge prior loyalty and even then it would be a bit of a privacy invasion. We live in an age where e-commerce is the vastly preferred way to do much of our business. The stores that wish to incentivize our loyalty to have a ton of information about us now, up to and including what we have bought from them, the monetary value therein, etc. So why are we still concerned about preserving our privacy there?

Even worse, incentivizing present loyalty is quite difficult. Ditto to future loyalty because you have no idea if your incentives will keep people loyal to your brand.

So, where does Apple drop in and shake things up? As I explain this, I will call this loyalty reward program Apple Dollars for the remainder of this post.

So, Apple Dollars makes signup easy. All you need is your Apple ID you already use with iTunes. Essentially, if you have had an Apple ID since very nearly the inception of iTunes, you are already a member of Apple Dollars. That deals with a large portion of the prior loyalty issue.

Then Apple Dollars makes present and future loyalty a piece of cake, because the more Apple Dollars you rack up in the simple signup process, the more Apple products you buy, the more Apple Dollars you rack up, etc.

So, why do I suggest Apple Dollars? Because this will absolutely kickstart Apple's sales in crucial markets like higher education (where students have either no or very limited disposable income) and in emerging markets like China.